The case study's research of Wal-supply Mart's chain demonstrates that the company works to maintain positive relationships with its clients, business partners, and even technology. According to Ketchen and Hult (2007, p. 573) the business has made an investment in understanding the needs of its clients in order to provide even better services. Regarding this, every significant player works together to ensure that the supply chain is a continuous success. Furthermore, it should be understood that this is a process that has taken them years to build on as it is something that was being implemented right from the onset (Robinson 2015).
Given the complexity of the Wal-Mart's supply chain, as it is to give it the diverse capabilities, it is still a source of competitive advantage for the organization to gain from. There are several factors that make this a reality. To start with, there are the Global Merchandising centers. According to Chesnais (2016, p.161), the advantage of this is that they allow for bulk purchasing which eventually lowers associated costs for the organization. It is important for any organization to reduce its sourcing costs not only for profit maximization but also for price setting for their target population (Hines 2004, p.75). The centers give Wal-Mart the advantage of being able to sell their products and services at lower prices thus enabling them to retain a culture they have been known for.
Another competitive advantage that Wal-Mart enjoys in the market is its ability implement information technology in a proper manner. IT today plays varies roles in organizational setups Mangan and Lalwani (2016, p.200) and for Wal-Mart, its goal is to use this platform for improved communication. As a global business with stores in different locations, it becomes a necessity to be able to ensure that data and any information remains relevant. This can only be achieved if communication is done in real time. Furthermore, the same platform allows the organization to connect to their suppliers in good time for data monitoring and management more so for inventory purposes.
The company's supply chain capabilities are still a source of competitive advantage because of its bargaining power with its suppliers. The organization is known for volume sales which mean that they request more from their suppliers thus continual business for everyone involved (Roberts and Berg 2012, p.80). Based on this, the firm is best placed to negotiate for price cuts, improved transportation of goods as well as marketing strategies. Therefore, a relationship of dependency is formed between its suppliers and the company making it possible for a more profitable bargaining position to be established.
There is also the competitive advantage being in a position to be consistent in its inventory. Just recently, the firm introduced a strategy that would see its fast moving products, restocked and shelved as effectively as possible. This means has a just in time delivery mechanism in play that enables its supply chain to constantly improve its performance for the benefit of the customer. Its distribution points for the above to be achieved should also be acknowledged. Rodrigue, Comtois, and Slack (2016, p.61) are of the opinion that a large network of distribution means that goods and services reach their destination within the shortest time possible and this is what Wal-Mart benefits from. The distance traveled from the wholesale or retailers is short enough for the high-velocity goods to be available on Wal-Mart shelves as demanded by the customers.
Lastly, there is the aspect of the organization not being unionized. Today, the retail business remains to be one of the few whose employees are not represented by a union. Although this might have its disadvantages, its supply chain benefits from not being influenced by external factors. Given that it operates on a low costs strategy (Belasen 2007, p.133), it being a non-unionized organization hinders its supply chain strategies from having to operate in an environment where external influences can be harmful to its current advantages. As such, it can be concluded that Wal-Mart's supply chain is a well-knit effort from various stakeholders who contribute directly to its competitive advantage by allowing the aforementioned capabilities to be achieved.
QUESTION 2
As Wal-Mart's executive vice-president of logistics, I would spend money and focus most energy on three area, global sourcing, project One Touch and Multichannel Strategy. These are the most recent improvements that the firm wants to build on as a means of ensuring growth and development are achieved in a market that is becoming highly competitive. Global sourcing as a strategy will allow for partnership relations to be established. From the case study, Mark (2012, p.12) explains that the firm just partnered with Li & Fung, one of the leading suppliers of diverse products and services on an international scale and for private business. For Wal-Mart, this means that it is getting to experience a whole new sourcing avenue that should further grow its diverse portfolio thus increased advantages.
There is also the benefit of cost consideration especially with the Global Merchandising centers which are divided into, "general merchandise, food, consumables, health and wellness and Wal-Mart.com and Softlines" (Mark 2012, p.12). This division helps to give more focus on how packaging and transportation ought to be done. As a result, goods move easily from the manufacturers into shelves because there is clearly indicated based on product description and together with the technology capabilities that Wal-Mart has implemented, sorting them out becomes easier for restocking purposes.
In regards to Project One Touch, money needs to be spent in regards to fine tuning the entire concepts. It is a strategy that if well implemented will see Wal-Mart becoming one of the stores that never lacks products which are something its target population is looking forward to. As a store, you need to be in a position to have even the most basic products available as this is one of the major reasons customers will frequent the location. The strategy here is to have Wal-Mart's products constantly available on the shelves by implementing a mechanism that sees suppliers and stores work on schedules and categories. Mark (2012, p.12) explains that the concept entails reorganizing inventory taking to emphasize on category sensitivity then formulating a schedule to ensure that the "high velocity" products are first stocked due to their demand. More energy needs to be implemented in growing the 93% product availability such that stores are constantly maintaining a flow of goods from the trailers to the shelves in a timely manner. Furthermore, the concept has thus far shown a growth in reinvestment and a price reduction for the benefit of both the target population and Wal-Mart.
As for Multi-channel strategy, tonal he goal is to have a continuous channel where customers can easily find products and services. One channel that will take up additional resources from the company in order for its full potential to be harnessed is online. This platform is today one of the most utilized and therefore, Wal-Mart has the opportunity to develop a presence in this market. According to Royer (2013, p.84), online shopping opens doors to an untapped market for organizations that do not necessarily wish to have a physical presence in a particular geographical location. For Wal-Mart, it can reach millions of clients by developing a strong online presence just like that of its competition, Amazon. As a household name, Wal-Mart appears to be lacking behind when it comes to online shopping. As such, there is room for improved shipment strategies that research can be done on to allow the firm grow its roots as far as this channel is concerned. It is a demand worth tapping into because of the magnitude of people now shopping online from different global locations (Wang and Yu 2006, p.161).
To further advance the above, strategies need to be implemented to push for more online sales. Free delivery for specific order costs can be implemented as a strategy which should potentially increase sales and traffic. To add to this, there is also the pilot shipment strategy that will improve how the demands of urban areas as met. Just for a reasonable fee, shipment can be made possible for urgent goods in locations that are yet to have a dense Wal-Mart presence. All in all, the multi channel strategy should increase sales more so from yet to be penetrated markets by the organization.
QUESTION 3
As the executive vice-president of logistics, I would make the following recommendations to the CEO. The first is to invest more in the company's marketing strategies especially in regards to global markets. Here in the U.S., Wal-Mart is a household name which means that a good percentage of the population are familiar with it and frequently visits the stores for their shopping needs. However, as globalization continues to hit hard on businesses with the need of expanding internationally for competitive advantage, the organization should first market itself before taking on a huge financial expansion (Arnold 2000). There are cases where going global has not barred the desired benefits that an organization was looking for (Lechner 2009, p.164). This means that with every expansion opportunity, there is always a 50% chance of succeeding or failing.
As a result, doing a small survey while marketing itself should be a policy adopted by Wal-Mart's managed to simply test its acceptance into the emerging market. The goal here is to ensure that the target population has a demand for its products and services and that any organization will be in a position to meet and satisfy the market needs (Waters 2007, p.111). The result of this is saved resources more so should the project prove to be unprofitable in the long run. Therefore, the recommendation here is for the CEO to come up with effective policies that will govern the manner in which the global market is explored to reduce risks associated with resource management.
Secondly, I would recommend for the advanced recommendation of information technology within Wal-Mart as integral as possible. Thus far, the strategy has proven to be effective in supply chain management as it allows for not only real time data information to be shared among relevant stakeholders (Shin 2001, p.169) but has improved communication systems in the organization. From a logistics point of view, every department can interconnect to each other if information technology is well integrated and employees trained on how to utilize and benefit from it.
It is a concept that will further push the online strategy to be more beneficial in meeting its obligations. Miller (2014) explains that there is a shift in how organizations are utilizing information technology and as such, Wal-Mart easily stands the chance of improving its online connectivity more so with its target population. To be able to reach its customers is very important to the survival and growth of the organization and that is why it needs to embrace technology as this is the best avenue they currently have to explore. Therefore, advancing the use of information technology will keep the firm abreast on new technical approaches on how to do things specific to their stores and well as the eCommerce sites for competitive advantage (Miller 2014).
In its global supply chain, Wal-Mart has the opportunity to develop into third world countries. Thus far, it has experienced great presence in Asia and Europe and perhaps it is time for it to expand into Africa. Developing countries offer huge market opportunities that firms such as Wal-Mart can no longer ignore. Technology has now made it easier to connect and gather information (Lummus and Vokurka 1999, p.13) and furthermore, improved transport systems make it even easier. This means that Wal-Mart can operate from an online platform where most operations are maintained at their corporate headquarters level and online have a physical store for receiving and collection of products by their customer. Better yet, they have the opportunity to be amongst the first to start shipping to such locations where their customers get their products at their doorstep. As Eyring, Johnson, and Nair (2011) explain, there is a growing demand for specific products by developing countries which may not be locally available and yet difficult to get from abroad because of none existing or poor shipping plans. This on its own is an opportunity for Wal-Mart to develop its global supply chain to further increase its competitive advantages.
In conclusion, Wal-Mart currently enjoys a supply chain strategy that has seen it be in a position to achieve and overcome some of the diverse market disadvantages for retailers. It is due to its supply's logistics that it is one of the largest retail stores in the U.S. with expanding global roots. However, because the competition is fast catching up to the strategies the firm is implementing, it now has the opportunity to diverse globally through its online platform. It needs to fully embrace the changes that technology has to offer if it wants to continue supporting its growth pattern. As highlighted and explained above, the organization still have a competitive advantage from the capabilities of its supply chain but more resources need to be dedicated to developing its global sourcing, Project One Touch and advancing its multi-channel strategies. In general, there are diverse opportunities for Wal-Mart to tap into and with the proper strategies, it can discover and continue growing from markets that it is yet to penetrate.
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